Ariz. Admin. Code § R20-6-2301 - Applicability; Definitions
A. This Article
applies to rates charged by health insurers for individual health insurance.
This Article does not apply to rates charged by health insurers for the
following:
1. Health insurance that a health
insurer issues to an employer or to any group described in either A.R.S. §
20-1401 or A.R.S. §
20-1404(A),
except health insurance issued to an association or its individual members as
described in
R20-6-2301(B)(7)(b);
2. Grandfathered health plan coverage as
defined in 45 CFR
147.140; or
3. Health insurance that covers excepted
benefits as described in section 2791(c) of the PHS Act,
42 U.S.C.
300gg-91(c).
B. In this Article, the following
definitions apply:
1. "Department" means the
Arizona Department of Insurance and Financial Institutions.
2. "Blanket disability insurance" has the
meaning prescribed in A.R.S. §
20-1404(A).
3. "CMS" means the Centers for Medicare &
Medicaid Services.
4. "Federal
medical loss ratio standard" means the applicable medical loss ratio standard
determined under 45 CFR 158, Subpart B.
5. "Health insurance" means disability
insurance as defined in A.R.S. §
20-253, a health care plan as
defined in A.R.S. §
20-1051(4) and
disability insurance or a health care plan offered by a hospital service
corporation, medical service corporation or hospital, medical, dental and
optometric service corporation as defined in A.R.S. § 20822.
6. "Health insurer" means an insurer, as that
term is defined in A.R.S. §
20-104, authorized to transact
disability insurance in Arizona, a health care services organization as defined
in A.R.S. §
20-1051(7) or a
hospital service corporation, medical service corporation or hospital, medical,
dental and optometric service corporation as defined in A.R.S. §
20-822(3).
7. "Individual health insurance" means health
insurance that a health insurer issues to either:
a. An individual, to cover:
i. The individual, or
ii. The individual's dependents, or
iii. The individual and the individual's
dependents.
b. An
association or its individual members to cover the individual members and their
dependents, and which the Department would regulate under A.R.S. Title 20,
Chapter 6 as individual health insurance if the health insurer did not issue it
to an association or individual members of an association.
8. "PHS Act" means Part A of Title XXVII of
the Public Health Service Act, 42 U.S.C. Chapter 6A.
9. "Product" means a discrete package of
individual health insurance coverage benefits that are offered using a
particular product network type (such as health maintenance organization,
preferred provider organization, exclusive provider organization, point of
service, or indemnity) within a service area that has its own set of rating and
pricing methodologies.
10.
"Preliminary justification" means a justification that consists of the parts
described in
R20-6-2302(A).
11. "Rate increase" means an increase of the
rates for an individual health insurance plan or plans within a product that:
a. Results from a change to the underlying
rate structure, and
b. May result
in premium changes.
12.
"Secretary" means the Secretary of the United States Department of Health and
Human Services.
13. "Threshold rate
increase" means a rate increase that meets or exceeds an Arizona-specific
threshold as noticed by the Secretary in
45 CFR
154.200, provided:
a. The average increase for all enrollees
weighted by premium volume meets or exceeds the applicable threshold;
and
b. If a rate increase that does
not otherwise meet or exceed the Arizona-specific threshold meets or exceeds
the Arizona-specific threshold when combined with a previous increase or
increases during the 12-month period preceding the date on which the rate
increase would become effective, then the rate increase must be considered to
meet or exceed the Arizona-specific threshold and is subject to threshold rate
review that shall include a review of the aggregate rate increases during the
applicable 12-month period.
14. "Threshold rate review" means the review
by the Department under this Article of a threshold rate increase.
15. "Unreasonable rate increase" means a rate
increase that results in benefits that are not reasonable in relation to the
premium the health insurer charges for the product. The following factors are
relevant in determining whether a rate increase results in benefits that are
unreasonable in relation to premium:
a. The
rate increase results in a projected medical loss ratio below the federal
medical loss ratio standard after accounting for any adjustments allowable
under federal law;
b. One or more
of the assumptions on which the health insurer based the rate increase is not
supported by sound actuarial reasoning, data and analysis;
c. The choice of assumptions or combination
of assumptions on which the insurer based the rate increase is
unreasonable;
d. The health issuer
provides data or documentation that is incomplete, inadequate or otherwise does
not provide a basis upon which the Department can determine the reasonableness
of a rate increase; or
e. The
increase results in premium differences between insureds within similar risk
categories that are unfairly discriminatory under A.R.S. Title 20, Chapter 2,
Article 6.
Notes
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